Sales of existing homes nationwide declined another 5.3% from December numbers, the lowest level of activity in 12 years. The total of 4.49 million units, reported by the National Association of Realtors, was well below analysts' estimates.
I'm not a big fan of the customary glass-half-full analysis of the NAR's chief
"[They] simply sat out for clarity and certainty on the nature of housing stimulus," he said. Of course, never one to pass up the opportunity to conclude that happy days are just around the corner, Yun added that falling interest rates and house prices should spur the market in coming months. In Mr. Yun's world, niggling issues like unemployment figures, consumer confidence and general fear seem to occupy a minor position in making housing market predictions.
But there may not be an interest rate low enough to spur the fearful to buy anything at this point. Personal example: My teenage daughter now has her license, and we need to buy another car. I was sucked in by the ads for a zero interest loan from General Motors for any of its cars -- until I read the fine print and realized you still have to commit to paying $16.67 per $1,000 borrowed per month. Millions like me are just not ready for that kind of commitment, "free" money or not.
Housing prices are also working their particular brand of psychological
These homeowners are actually the only ones in this market in a somewhat secure position -- for now. If they sell their homes today, they can take the equity and use it for another home. If market values continue down after they move, so what? They would have likely lost more money on their home if they hadn't sold it. Worse, though, would be if they stayed put and, in a continuing downward spiral, watched all their equity erode. Then they might not have enough left to put down on the next house.
Going into gridlock is probably not the best response to uncertainty.